Any game that Zynga builds that includes Facebook integration or Facebook
data will be exclusive to Facebook for the duration of the two
companies' agreement.

Zynga must tell Facebook about new games at
least a week before they launch.

In exchange, Facebook will help Zynga meet monthly unique user targets for its
games, and share some of the revenue from ads it sells
next to Zynga games with Zynga.UPDATE: Facebook tells us that's not true.
Apologies.

Apparently, Zynga can't
launch games on certain rival social platforms, although
that list is redacted, so it's not clear how extensive it is or
how the deal really works.

Screenshot

There are a couple things to take away from this:

Facebook basically owns Zynga. We knew that
Zynga had to share virtual goods revenue and spend advertising
on Facebook, but this goes beyond a tax. This is control.
Facebook decides what games Zynga can launch, and when, and how
successful these games will be.

The Facebook Platform is not a level playing field at
all. Whenever Facebook talks up the success of Zynga
on its platform, they always make sure to mention that other
competitors could theoretically catch up to Zynga. In reality,
that doesn't seem to be the case. Facebook tweaks how much
sharing of actions on Zynga games is allowed so that those
games can get all the users Facebook promised. Maybe a couple
of other big players like Playdom and Playfish have similar deals. It's
hard to believe the dozens of smaller games makers do.
What's more, most
of the ads that appear next to Zynga games are ads for other,
rival social games. So when a small maker of Facebook games
buys Facebook ads, some portion of that goes to big-dog
Zynga. Heartening.

Here's what it means for prospective Zynga investors:

Zynga's Facebook risk is enormous. Zynga is
basically Facebook's outsourced games arm. Paradoxically, it
might be good for the stock short-term, because Facebook is
still private and owning Zynga is even more a proxy for owning
Facebook, so investors could pile in.

Over the longer term, however, this clearly doesn't
make Zynga look great. Even though revenue from Facebook
games is increasing as Zynga gets better at monetizing, unique
users are basically flat. Zynga's interest is clearly to build
games on other platforms besides Facebook, both for growth and
for platform risk mitigation. But it seems Facebook gets to say
on what platforms Zynga can and can't launch games. Zynga is
betting on mobile as its next big platform. Is GameCenter,
Apple's iOS gaming social service, one of the
"social platforms" on which Zynga can't launch games without
Facebook's say-so?

Über-VC and Zynga investor Fred
Wilson has a saying: "be your own bitch," meaning don't be
overly dependent on one platform; e.g. don't be a Google bitch by relying on SEO for all your
traffic. But this filing seems to indicate conclusively, however,
that Zynga is Facebook's bitch.